Revised OAR- SIM QUESTION! HELP NEEDED

Hi,

Can some1 be able to help me with regards to answering the question


Basis Department A Department B

Supervisor Rates £20000 No Emplee £10000 £10000

Rates Rents £10000 Area 8000 2000



Labour Hours 1000 500

Machine Hours 50 1000


Furhter Info: The salary costs only realte to Department A. Department B is mainly machien based.

Requirement: Re-apportion the above rates on a more suitable basis and calculate OAR for each department.



Any help HUGELY grateful

Comments

  • sammyd22sammyd22 Well-Known Posts: 207Registered
    Hi,

    Can some1 be able to help me with regards to answering the question


    Basis Department A Department B

    Supervisor Rates £20000 No Emplee £10000 £10000

    Rates Rents £10000 Area 8000 2000



    Labour Hours 1000 500

    Machine Hours 50 1000


    Furhter Info: The salary costs only realte to Department A. Department B is mainly machien based.

    Requirement: Re-apportion the above rates on a more suitable basis and calculate OAR for each department.



    Any help HUGELY grateful


    Dept A Dept B Total
    Supervisor Wages 10000 10000 20000
    Rent & Rates 5000 5000 10000
    Totals 15000 15000 30000
    Re -Apportion Wages 20000 0 20000
    Re-Apportion Rent & Rates 8000 2000 10000
    Total Costs 28000 2000 30000
  • sammyd22sammyd22 Well-Known Posts: 207Registered
    Hi,

    Can some1 be able to help me with regards to answering the question


    Basis Department A Department B

    Supervisor Rates £20000 No Emplee £10000 £10000

    Rates Rents £10000 Area 8000 2000



    Labour Hours 1000 500

    Machine Hours 50 1000


    Furhter Info: The salary costs only realte to Department A. Department B is mainly machien based.

    Requirement: Re-apportion the above rates on a more suitable basis and calculate OAR for each department.



    Any help HUGELY grateful


    Dept A Dept B Total
    Supervisor Wages 10000 10000 20000
    Rent & Rates 8000 2000 10000
    Totals 18000 12000 30000
    _____________________________
    Re -Apportion Wages 20000 0 20000
    Re-Apportion Rent & Rates 8000 2000 10000
    Total Costs 28000 2000 30000

    This is what i have come up with, but the question you are asking isnt clear?

    Are we treating Labour and Rent seperately?

    I would presume we treat them as a total figure, therefore:

    Dept A = 28,000/Labour Hrs 1,500 = £18.66 OAR as more labour is carried out in that Dept.
    Dept B = 2,000/1,050 Mach Hrs = £19.05 OAR as this dept mainly uses Machines.

    Also above i have Apportioned Rent & Rates as Follows:

    £10,000 / 1,000 (Floor Area) = £10

    £10 x 800 (Floor area A) = 8,000
    £10 x 200 (Floor Area B) = 2,000

    I hope this is right.

    As the question was a bit unclear i have presumed the above to be the most obvious assumptions.
  • ryannnnnnnnnnnnnryannnnnnnnnnnnn New Member Posts: 13Registered
    i know the question threw me but thtat wasthe question that i was given
  • sammyd22sammyd22 Well-Known Posts: 207Registered
    i know the question threw me but thtat wasthe question that i was given

    I would presume the above unless anyone has got a better answer.
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